In a decision likely to intensify trans-Atlantic trade tensions, European Union (EU) regulators on July 23 hit Google with a US$1bil (RM4.09bil) fine for illegally undercutting competition through its dominance as a search engine.
President Donald Trump has previously threatened to retaliate against the EU for what he views as the unfair targeting of American technology companies. The Google decision comes when he is weighing a new batch of tariffs on the EU and other major trading partners.
In explaining the July 23 fine of €890mil (RM4.15bil), regulators in Brussels said Google had used its position as the world’s largest search engine to unfairly boost its services in areas like shopping, travel, games and language translation. Google displayed its own services more prominently at the top of search results, while relegating competing services farther down the page, according to regulators.
The European Commission, which conducted the investigation, also concluded that the tech giant used unfair restrictions on its Google Play app store that prevent app developers from communicating with users, or conducting transactions that could reduce the fees Google can collect.
The commission, the executive arm of the EU, said Google violated the Digital Markets Act, known as the DMA, a law passed in 2022 to stop the largest tech platforms from using their interlocking services to box in users and squeeze out rivals. Authorities have argued the biggest tech companies have become so dominant in areas like Internet search, smartphones, e-commerce and social media that they serve as gatekeepers and determine the fate of other businesses and can harm competition.
“The best products should succeed because they’re better, not because they’re owned by the company running the search engine,” Teresa Ribera, the executive vice president of the European Commission overseeing competition policy, said in a statement on July 23. “This is the promise of the DMA, protecting fairness, choice and innovation in digital markets for the benefit of all European citizens.”
Google has 60 days to comply with the decision, including increasing the prominence of rival online services, or risks further penalties of up to five per cent of its worldwide revenue.
The company has been a frequent target of EU regulators over the past decade, having been fined more than €10bil (RM46.69bil) since 2017. Kent Walker, Google’s general counsel, said July 23’s decision would require product design changes that will harm services for European users.
“This isn’t fair competition; it’s product degradation,” he said. “Regulation should improve products, not make them worse.”
The fine is small in comparison with Google’s overall business. On July 22, Google’s parent company Alphabet reported a quarterly profit of US$112.1bil (RM458.88bil), boosted by investments made in SpaceX and Anthropic.
Jamieson Greer, the US trade representative, criticised the EU decision, calling it “the latest in an increasingly aggressive approach targeting US technology firms.” The actions, he said, risk the “continuation of trans-Atlantic stability with respect to trade.”
On July 24, the White House is expected to announce new tariffs on trade with the EU and other countries.
An EU official said the fine was announced on July 23 because it was ready – without an eye on American trade developments – and that it would not come as a surprise to the Trump administration.
Since the earliest days returning to the White House, Trump has warned it would take “responsive actions” against regulation of American tech firms.
Last month, Trump threatened tariffs against countries for digital services taxes against American firms. In December, the Office of the US Trade Representative said European companies including Swedish music service Spotify, German industrial giant Siemens and French artificial intelligence developer Mistral could be targeted with fees or new restrictions.
American regulators have also targeted Google. Last year, the company was ordered to share search results and some data with rival companies as part of a landmark monopoly case that has some similarities to July 23’s ruling in Brussels.
The EU has long been the world’s most aggressive regulator of the tech industry in areas like data privacy, competition and harmful online content. Even as leaders in the region have taken steps to ease rules for AI and other technology to boost economic growth, the bloc has pushed forward with investigations and penalties of some of the industry’s biggest companies.
Google was ordered this month by EU regulators to lift restrictions that limit how rival AI companies can reach users of Android smartphones. Meta was told this month to make major design changes to Instagram and Facebook to make the services less addictive.
European regulators have also targeted Chinese companies. Alibaba’s AliExpress was fined the equivalent of US$629mil (RM2.57bil) for the sale of illegal, unsafe and counterfeit products on its platform. In February, TikTok, owned by ByteDance, was told to make changes to make its service less addictive.
The EU is also considering a law to bar young people from social media. – ©2026 The New York Times Company
This article originally appeared in The New York Times.
